Current account: The classic
Current accounts are the classics amongst bank accounts. Nowadays, almost everyone has one to handle ongoing payments. Often, a current account is used as the salary account and to pay rent, bills, insurance contributions and other regular payments.
You will receive a bank card after opening a current account which can be used to withdraw money and to make payments. In some cases, a current account is also linked to a credit card. All payments made with this card will be debited from the connected account. This happens either instantly or in regular intervals.
It is relatively easy to open a current account as the banks’ risk of losing money is quite low. This also means that the conditions a customer must fulfil to open an account are relatively easy to meet.
Normally, you will not receive any interest on the money on your current account. Only in rare cases banks pay their customers a very low interest rate – therefore you should not count on high profits from a normal current account.
As banks want to make money with their customers, they often charge fees – either as interest when using the overdraft of the account or as a monthly activity charge. In some cases, banks even charge their customers for single payments, e.g. money transfers. Therefore, you should carefully check with your bank if they charge a fee at all and if so, for which services.
If your current account includes an activity charge, it will be deducted from your balance in regular intervals. Most of the time, this will happen monthly. As there are also a lot of free accounts on the market, it is worth having a look at a variety of different offers. Mostly, free accounts require the fulfilment of certain requirements, for example a regular receipt of money. You should check these requirements beforehand and consider if you can fulfil them.
Account for everyone
A couple of years ago it was ruled that all EU citizens are entitled to own a bank account. This means that people who may normally not be considered creditworthy, can open a bank account, too.
As banks want to hedge against any potential losses, these so called basic accounts often do not have an overdraft facility. This means that there always has to be money on the account to make payments or to withdraw money. Further, activity charges for basic accounts are often substantially higher than for normal current accounts – often they range between 9 and 15€ per month. If you want to save money, you should compare different accounts before opening one.
Having a current account does not necessarily mean that one person is the sole owner of the account. Many banks offer their customers joint accounts which enable multiple persons to equally own the account. All owners have the same access to the account and normally each person has their own bank card, as well.
A joint account can be a convenient solution if multiple persons share a common flat or house. The account can be a basis for joint payments, e.g. rent, bills or food. This way, inconvenient money transfers between the participants can be avoided.